Alec Simantov
Alec serves as Director within the Research Universities Practice. In this role, Alec leverages expertise in the federal budget and Congress to provide strategic oversight on science, technology, and higher education policy and federal funding. Alec also co-leads internal content and knowledge management initiatives, driving practice growth and advancing strategic intelligence capabilities.
What’s in the FY27 Continuing Resolution?
The law prohibits the Office of Management and Budget (OMB) from finalizing and implementing its proposed revisions to the Uniform Guidance for Federal Financial Assistance for the duration of the CR. The OMB proposal, if finalized, would give senior political appointees greater influence over grant approval decisions. The proposal garnered more than 500,000 public comments reflecting widespread concern among state and local governments, institutions of higher education, nonprofit and advocacy organizations, and other federal grant recipients. However, the CR does not prohibit federal agencies from altering agency-specific financial assistance policies and the National Science Foundation began the process of revising its Proposal and Award Policies and Procedures Guide (PAPPG) to align with White House executive orders and OMB’s proposal.
The CR also preserves existing protections for negotiated indirect cost rates contained in the FY26 funding bills. In FY26, Congress directed multiple agencies including NSF, NIH, NASA, DOE, Commerce, and DoD to continue applying FY24 negotiated rates for institutions of higher education and prohibited OMB from making changes to indirect cost rates through rulemaking.
Agencies are also prohibited from using appropriations under the CR to initiate new activities that did not receive funding in FY26. This prohibits the front-loading of awards and distributing funds in ways that would impinge on Congress’ final funding prerogatives. Grantees and other recipients of federal funding can expect agencies to be more cautious in their financial activities until final FY27 appropriations are enacted. This may include delaying funding opportunity announcements, holding award announcements, and overall slower grantmaking.
However, several federal science agencies will enter FY27 with unobligated funding balances from multi-year or no-year appropriations which remain legally available for new obligations in FY27. This includes agencies like ARPA-H, ARPA-E, the DOE Office of Science, NASA, NIST, NIFA (USDA), NOAA, NSF, and DoD basic and applied research. These balances were appropriated before the CR and they may provide those agencies with additional flexibilities through December 11. However, agencies may still act cautiously with these balances while final FY27 funding levels remain uncertain.
When will Congress Enact Final FY27 Funding?
Negotiations over a final funding package in Congress are expected to resume after the midterm election. The House will reconvene for an additional week of business after the Labor Day holiday and is then expected to go on recess by September 17 and not return until mid-November after the midterm election. The Senate is currently in recess and scheduled to return on September 14 before recessing again on October 2 until after the midterm election.
The final status of the OMB rule will likely be a major consideration during final FY27 negotiations. Including a full ban on the rule taking effect is supported by Congressional Democrats. Several Republican members of Congress, including Senate Appropriations Chair Susan Collins (R-ME), are also highly critical of the OMB proposal, but widespread GOP support for including a total ban in final funding bills remains uncertain.
Additionally, the results of the November election are expected to influence final negotiations. If party control of either (or both) chambers of Congress flips to Democrats, shifts in power dynamics will likely influence the timing of a final funding package and negotiation strategies, leading to uncertainty on whether a lame-duck Congress can come to a final agreement. This would require either another short-term CR or a full-year CR to avoid another government shutdown.
McAllister & Quinn will continue to monitor the shifting dynamics in Congress, election results, and FY27 appropriations outcomes.
How McAllister & Quinn Can Help Position You for Opportunities
McAllister and Quinn’s strategic intelligence team tracks federal budget and appropriations developments, legislative action and agency activity, and emerging priorities. We help position your research enterprise and teams to anticipate and compete for funding opportunities. Contact us below to request more information about our research development, government relations, and strategic intelligence services.
